Publication Date: January 12, 2021
Birla Cellulose, a part of India’s large conglomerate Aditya Birla Group, manufactured viscose fibre, which came from wood and was naturally sustainable. In 2017, the Changing Markets Foundation (CMF) brought out a report titled Dirty Fashion, which described the environmental damage caused by manufacturing practices used in viscose fibre production. The report detailed impacts on the environment, bodies of water, and communities around viscose manufacturing plants. Birla Cellulose responded to the report by collaborating with CMF and making significant changes to its manufacturing processes to comply with the highest standards around the globe. It ensured that its raw materials were responsibly sourced and that its products were responsibly manufactured and then properly handled at the end of their lives. The company was proud of its achievements. At the same time, it recognized that it needed to do more. In late 2019, the company’s business director wondered how to make the company even more sustainable. What level of investment would be required? How could it adapt to changing consumer preferences and still retain the benefits it had recently gained?
The case is suitable for post-graduate-level modules on change management in a course focusing on sustainability. The case looks at the crisis faced by a large textile company in response to a report that was critical of its sustainability practices and outlines how the company handled the situation, pointing to lessons on participative leadership, operational decentralization, long-term rather than stop-gap solutions, and leadership and decision making characterized by introspection and self-criticism rather than finger pointing. After working through the case, students will have gained the ability to do the following:
- Describe a company’s response to an external threat.
- Explain the change management process.
- Define sustainable fashion and outline its implications for competitive advantage.
Source: Ivey Publishing